Sharon is adept at crunching the numbers. As an accountant, she can see when the numbers are written on the ledger, so to speak.

That's why she's concerned about her retirement future. For one thing, she's in her late 50s and between herself and her husband, they've accumulated only about $90,000 in RRSPs and other savings.

Sharon and Arnold's finances

Income:

Sharon: $70,174 ($3,421 net a month)

Arnold: $15,444 ($1,125 net a month)

Monthly expenses: $4,546

Debts:

Mortgage: $42,947 at 4.49 per cent fixed

Lines of credit, combined: $53,773 at 3.5 per cent variable

Assets:

Sharon RRSP: $43,474

Spousal RRSP: $16,263

Savings: $4,400

Sharon non-registered investments: $24,956

Sharon pension 1: $580 a month at age 62

Sharon pension 2: $1,042 a month at age 65

Home: $219,000

Net worth: $211,373 (excludes pensions)

Sharon, who earns about $70,000 annually, and her husband, Arnold, have had to endure some big bumps in the road that have set them back financially.

He suffered a major illness a few years back, which drained their finances substantially.

Today, they're about $96,000 in debt between two home-equity lines of credit and their mortgage on a home worth $219,000.

The financial fail-safe for them all along has been Sharon's defined-benefit pension through her employer and another defined-benefit pension from a previous job.

But in the last few years, she's been concerned about the longevity of her current pension plan.

"By the time I'm 65, it might not be there anymore."

While she is guaranteed $580 a month at age 62 from her previous job, she's worried whether she'll be able to get collect the $1,640 a month promised to her at age 65 from her present job.

She says the pension plan has a multimillion-dollar shortfall that keeps growing, and she is considering the option of retiring early and taking the commuted value -- about $185,000 -- next year.

"But can I afford to do it?"

Certified financial planner MaryAnn Kokan-Nyhof says Sharon is facing the same problem many other members of private-sector defined-benefit pension plans face.

"Most of these plans are underfunded," says the adviser with Desjardins Financial Security Investments Inc. in Winnipeg.

"So the strategy of hoping it won't go bankrupt is like an ostrich sticking its head in the sand."

That Sharon's plan has growing liabilities from one actuarial evaluation to the next isn't a good sign of its long-term financial health. And it's likely an ill omen for her retirement plan, because Manitoba pension legislation does not guarantee pension-plan members will receive their full pensions if a plan goes bankrupt.

"There is no magic answer for this question," says Kokan-Nyhof, who is very familiar with the topic, sitting on one pension-plan board and two pension-plan committees.

Given the longevity of the pension plan is in question, Sharon should consider her available options, including taking the commuted value.

Kokan-Nyhof says the $185,861 lump sum Sharon says she is eligible to receive will only go so far. Sharon would be hard-pressed to get a monthly income from an investment equivalent to the guaranteed lifetime payment from her pension plan.

What's worse, after reviewing the pension-plan documents, Kokan-Nyhof says it is clear Sharon won't have all of the $185,000 to invest.

"In this case, the plan option will only allow her to take $138,500 now and the remaining balance in five years."

If she does take the commuted value, Sharon should investigate investment options that would ultimately provide her with a guaranteed income, similar to the pension plan she is foregoing. For example, she could invest the money in a guaranteed lifetime income product with an insurance company, which will pay a notional bonus of five per cent annually until she needs to draw an income.

If she chooses this strategy and waits until age 65, she can expect a monthly payment of about $725 for the rest of her life.

This is far short of the pension payment she would receive if she remained a plan member. Even though she would still be eligible to receive the remaining balance from the plan of about $46,000 if she chooses to take the commuted value, Sharon has no guarantee this secondary sum of money will be around in eight years.

As a result, Kokan-Nyhof says Sharon is best to consider all the other options offered under the plan.

One of them involves retiring next year and earning a $928-a-month guaranteed lifetime payment. Kokan-Nyhof says it's an option worth considering for a couple of reasons.

First, once plan members start receiving their benefits, most pension plans will buy an annuity from an insurance firm to pay the guaranteed monthly payments.

"Sharon should talk to the pension committee to figure out how her pension payments will be funded," Kokan-Nyhof says. "So if she chooses that option, will a sum of money go to an insurer to make those annuity payments?"

If that's the case, her pension benefit is guaranteed to be paid regardless of what happens to the plan afterward.

She should also consider this option because her expected monthly payment, if she sticks with the plan until age 65, is not $1,640 a month. It's $1,042 a month, according to the pension statement, so the option to take her pension next year seems all the more appealing.

Still, Kokan-Nyhof says Sharon would certainly have to continue working until age 65 because she has to pay off debts and save more for retirement. As a result, she needs to think about whether she will be able to find work that will pay as much as she earns at her current job.

Yet even if she decides to take the pension next year, she will not receive the full monthly payment of about $928.

"This is the single-life annuity option," Kokan-Nyhof says.

Under Manitoba law, she needs to choose one of the joint to last survivor options, or have her husband sign a waiver that would nullify his right to receive her pension if she dies before him.

"She likely wouldn't want to do that because he would get nothing," she says.

"So let's assume in a perfect world she would want one of the joint to last survivor pension options, which pay a monthly pension about the $700 to $800 range."

It's not ideal, but this option may be better suited to Sharon's situation than others. In the end, only she can decide what's best for her.

"If we knew all the answers, it'd be a quick decision to make, but we don't, so she has to make an informed choice by getting as much information as possible," Kokan-Nyhof says. "Then if it is an option for her to stop working there, take the pension and go work somewhere else, I would suggest it might be worth considering."

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